With visitor numbers expected to drop 10% in
2009, the Spanish hotel market is suffering greater year-on-year
declines in performance than some of its European neighbors.
Visitors from major source markets such as
Germany, the U.K. and France are in decline, with U.K. travelers
further deterred by the 20% weakening of Sterling against the euro
during the past 12 months and the increased competition from
destinations such as Turkey and Egypt.
According to data compiled by STR Global, decreasing occupancy (-13.5%)
at Spanish hotels has led to heavy price cutting (-11.8%),
which together have dragged RevPAR down by
“Significant price cuts have failed to stimulate
demand”, said Elizabeth Randall, managing director of STR Global.
“Until occupancy recovers, it is hard to see from where
improvement in Spain will come. It may now take some time to make
up the fall in RevPAR, which is amongst the highest in Southern
Poor performance compared with
international neighbours is one thing, but Spain is also suffering
from the impact of the economic crisis on the domestic market.
abrupt decline of the real estate industry and an unemployment
rate of around 19%, the highest in Europe, make for tough times
across the country.
Spain’s two biggest markets, Madrid and
Barcelona, may still have higher rates and RevPAR than the
national average, but both are in more significant decline.
Madrid’s RevPAR through July 2009 has fallen 32% compared
to 2008, a rate of decline only exceeded by Moscow amongst
Europe’s capital cities.
“Madrid has been working hard on its
image as a cultural destination to complement its business
reputation,” Randall explained. “However, our Comprehensive
Pipeline Outlook report shows an increased supply of 1,021 rooms
over the past 12 months and a further five hotels under
construction. This additional supply together with the reduced
demand is almost the worst-case scenario. Barcelona has seen a
similar decline in RevPAR with a fall of 28.5%. The city’s
position will not be improved as the STR Global
Comprehensive Pipeline Outlook report shows a further
1,290 rooms under construction, including the 473-room W
Barcelona, the second W Hotel in Europe, which will open
in October ‘09.”
reach in Spain is significant with more than 730 hotels
representing some 123,000 rooms sampled across the country. In
line with global hotel performance, select Spanish cities are
experiencing contraction across the board, highlighted by the
double-digit declines in year-on-year occupancy in all but three
cities (Bilbao, Cordoba and Marbella).
The 59.4% fall in
Zaragoza’s RevPAR is dramatic and can only be attributed to the
build-up to the International Expo “Water and Sustainable
Development”, which took place from June to September 2008.
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